An 83(b) election must be filed with the IRS within 30 days of the grant/purchase date. Late filings are not accepted. Once missed, the election cannot be made retroactively.
Grant / Purchase Details
$0.001 is typical for founder restricted stock; early-exercise ISOs use the 409A FMV
The spread at grant is what's taxable if you file 83(b) now
Exit Scenarios
Risk of leaving / termination before full vesting. Higher for early-stage.
83(b) Filing Verdict
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Tax owed if you file now
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Expected tax at vest (no election)
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EV of tax saved by filing
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Downside: tax paid if forfeited
Scenario Analysis
| Scenario | FMV at Vest | Tax (no 83b) | Tax (with 83b) | Savings from 83(b) |
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What the 83(b) Election Does
Without election: You pay ordinary income tax on the spread (FMV − purchase price) as each tranche vests over — years.
With election (filed within 30 days of grant): You pay ordinary income tax on the spread today (often near-zero for founder stock at grant). From that point, any appreciation is treated as long-term capital gain — at a lower rate — once you hold >1 year from the grant date.
The LTCG clock starts at grant, not at each vesting date. This is the primary benefit for rapidly-appreciating startup stock.
With election (filed within 30 days of grant): You pay ordinary income tax on the spread today (often near-zero for founder stock at grant). From that point, any appreciation is treated as long-term capital gain — at a lower rate — once you hold >1 year from the grant date.
The LTCG clock starts at grant, not at each vesting date. This is the primary benefit for rapidly-appreciating startup stock.
Next Steps
ISO-AMT Planner
If ISOs are early-exercised, model AMT exposure (AL-116)
Exit Waterfall Modeler
What your shares net after the preference stack at exit (AL-148)
QSBS §1202 Estimator
Filing early starts your QSBS hold-period clock (AL-149)
Inbound: Equity Comp Analyzer (AL-33) · Downstream: ISO-AMT Planner (AL-116), Exit Waterfall (AL-148), QSBS Estimator (AL-149)